CHAPTER 10. NATIONAL IMPACT ANALYSIS 

TABLE OF CONTENTS

10.1 INTRODUCTION.............................................................................................................. 10-1

10.2 BASE AND STANDARDS CASE EFFICIENCIES ...................................................... 10-1

10.3 NATIONAL ENERGY SAVINGS................................................................................... 10-4

10.3.1 Definition ............................................................................................................... 10-4

10.3.2 NES Inputs............................................................................................................. 10-5

10.3.2.1 Annual Energy Consumption per Unit....................................................... 10-5

10.3.2.2 Shipments..................................................................................................... 10-6

10.3.2.3 Equipment Stock.......................................................................................... 10-6

10.3.2.4 National Annual Energy Consumption ...................................................... 10-6

10.3.2.5 Site to Primary Energy Conversion Factor ................................................ 10-7

10.1.1.1 Full-Fuel-Cycle Energy Factors.................................................................. 10-7

10.4 NET PRESENT VALUE OF CUSTOMER BENEFITS ................................................ 10-8

10.4.1 Net Present Value Definition ................................................................................ 10-8

10.4.2 Inputs to Calculation.............................................................................................. 10-9

10.4.2.1 Total Annual Installed Cost ...................................................................... 10-10

10.4.2.2 Total Annual Operating Cost .................................................................... 10-10

10.4.2.3 Discount Factor.......................................................................................... 10-12

10.4.2.4 Present Value of Increased Installed Costs.............................................. 10-12

10.4.2.5 Present Value of Savings........................................................................... 10-12

10.5 TRIAL STANDARD LEVELS....................................................................................... 10-13

10.6 NES AND NPV RESULTS............................................................................................. 10-13

10.6.1 National Energy Savings..................................................................................... 10-13

10.6.2 Annual Costs and Savings................................................................................... 10-14

10.6.3 Net Present Value Results................................................................................... 10-18

10.6.4 Alternative Base Case Analysis.......................................................................... 10-21

LIST OF TABLES

Table 10.2.1 Efficiency Distributions for the Base and Standards Cases in 2019 for 

the PTAC <7,000 Btu/h Equipment Class..................................................... 10-2

Table 10.2.2 Efficiency Distributions for the Base and Standards Cases in 2019 for 

the PTAC 7,000 – 15,000 Btu/h Equipment Class........................................ 10-2

Table 10.2.3 Efficiency Distributions for the Base and Standards Cases for the 

PTAC > 15,000 Btu/h Equipment Class........................................................ 10-2

Table 10.2.4 Efficiency Distributions for the Base and Standards Cases in 2019 for 

the PTHP < 7,000 Btu/h Equipment Class .................................................... 10-3

Table 10.2.5 Efficiency Distributions for the Base and Standards Cases in 2019 for 

the PTHP 7,000 – 15,000 Btu/h Equipment Class........................................ 10-3

Table 10.2.6 Efficiency Distributions for the Base and Standards Cases in 2019 for 

the PTHP > 15,000 Btu/h Equipment Class .................................................. 10-3

Table 10.3.1 Full-Fuel-Cycle Energy Multipliers (Based on AEO 2013)......................... 10-8

10-i 
Table 10.4.1 Average Total Installed Costs for PTACs and PTHPs in 2019 (2013$).... 10-10

Table 10.4.2 Average Annual Electricity Costs in 2019 (2013$).................................... 10-11

Table 10.4.5 Average Repair Cost Per Unit for PTACs and PTHPs in 2019 (2013$)... 10-12

Table 10.5.1 Trial Standard Levels for PTACs and PTHPs............................................ 10-13

Table 10.6.1 Cumulative Primary Energy Savings for PTAC and PTHP equipment 

(quads)............................................................................................................ 10-14

Table 10.6.2 Full-Fuel-Cycle National Energy Savings for PTAC and PTHP (quads).. 10-14

Table 10.6.3 Cumulative NPV Results for PTAC and PTHP, 7% Discount Rate 

(millions 2013$) ............................................................................................ 10-18

Table 10.6.4 Cumulative NPV Results for PTAC and PTHP, 3% Discount Rate 

(millions 2013$) ............................................................................................ 10-19

Table 10.6.5 Cumulative Primary Energy Savings for PTAC and PTHP Equipment 

Compared to the Alternative Base Case (quads)......................................... 10-21

Table 10.6.6 Full-Fuel-Cycle National Energy Savings for PTAC and PTHP 

Equipment Compared to the Alternative Base Case (quads)...................... 10-21

Table 10.6.7 Cumulative NPV Results for PTAC and PTHP Equipment Compared 

to the Alternative Base Case, 7% Discount Rate (millions 2013$)............ 10-22

Table 10.6.8 Cumulative NPV Results for PTAC and PTHP Equipment Compared 

to the Alternative Base Case, 3% Discount Rate (millions 2013$)............ 10-22

LIST OF FIGURES

Figure 10.2.1 Efficiency Trends for Packaged Terminal Air Conditioners and Heat 

Pumps............................................................................................................... 10-4

Figure 10.3.1 Site-to-Power Plant Energy Use Factors........................................................ 10-7

Figure 10.6.1 Packaged Terminal Air Conditioners > 7,000 Btu/h: Installed Costs, 

Operating Cost Savings, and Net Savings; TSL 2....................................... 10-15

Figure 10.6.2 Packaged Terminal Air Conditioners ≥ 7,000 Btu/h and ≤15,000 

Btu/h: Installed Costs, Operating Cost Savings, and Net Savings; TSL 

2 ...................................................................................................................... 10-16

Figure 10.6.3 Packaged Terminal Air Conditioners > 15,000 Btu/h: Installed Costs, 

Operating Cost Savings, and Net Savings; TSL 2....................................... 10-16

Figure 10.6.4 Packaged Terminal Heat Pumps – < 7,000 Btu/h: Installed Costs, 

Operating Cost Savings, and Net Savings; TSL 2....................................... 10-16

Figure 10.6.5 Packaged Terminal Heat Pumps ≥ 7,000 Btu/h and ≤15,000 Btu/h : 

Installed Costs, Operating Cost Savings, and Net Savings; TSL 2............ 10-17

Figure 10.6.6 Packaged Terminal Heat Pumps > 15,000 Btu/h: Installed Costs, 

Operating Cost Savings, and Net Savings; TSL 2....................................... 10-18

Figure 10.6.7 TSL 2: Present Value of Annual Costs and Benefits for all PTACs and 

PTHPs, 7% Discount Rate ............................................................................ 10-19

Figure 10.6.8 TSL 2: Present Value of Annual Costs and Benefits for all PTACs and 

PTHPs, 3% Discount Rate ............................................................................ 10-20

10-ii
CHAPTER 10. NATIONAL IMPACT ANALYSIS 

10.1 INTRODUCTION

This chapter describes the method for estimating the quantity and net value to customers

of future national energy savings (NES) from possible trial standard levels (TSLs). Results 

described here include: (1) national energy consumption and savings, (2) monetary value of 

operating cost savings to the Nation due to standards, (3) increased total installed costs to the 

Nation due to standards, and 4) the net present value (NPV) of operating cost savings (the 

difference between value of operating cost savings and increased total installed costs).

 

DOE performed all calculations using a Microsoft Excel® spreadsheet, which is 

accessible on the Internet

(http://www1.eere.energy.gov/buildings/appliance_standards/buildings/appliance_standards/prod

uct.aspx/productid/77). 

Chapter 9 provides a detailed description of the shipments model that DOE used to 

project future shipments of PTAC and PTHP equipment. It includes estimates of efficiency 

market shares in the base case and the considered standards cases, as well as estimates of the 

impact of standards on the distribution of shipment efficiencies. 

10.2 BASE AND STANDARDS CASE EFFICIENCIES 

For each equipment class, DOE developed a distribution of efficiencies in the base case 

for 2019 (the assumed compliance date for new standards), as described in chapter 8. In each 

standards case, DOE assumed a “roll-up” scenario to establish the efficiency distribution for

2019. Equipment efficiencies in the base case that did not meet the standard under consideration 

“roll up” to meet the new standard level. All efficiency shares in the base case that were above 

the standard under consideration would not be affected. 

The tables below present the efficiency distributions for the base case and standards cases 

for each PTAC and PTHP equipment class. Each standards case refers to a standard at the 

corresponding efficiency level. For example, standards case 1 refers to the case with a standard 

at efficiency level 1. To account for technology improvements, an efficiency trend is applied to 

the base case and the standards cases to shift the distribution of efficiencies to higher levels. 

10-1 
Table 10.2.1 Efficiency Distributions for the Base and Standards Cases in 2019 for the 

PTAC <7,000 Btu/h Equipment Class

Efficiency Level

Market Share

ASHRAE Standards Case

1 2 3 4 5

Baseline 0.0%

1 0.0%

2 63.5% 63.5%

3 36.5% 36.5% 100.0%

4 0.0% 0.0% 0.0% 100.0%

5 0.0% 0.0% 0.0% 0.0% 100.0%

6 0.0% 0.0% 0.0% 0.0% 0.0% 100.0%

Table 10.2.2 Efficiency Distributions for the Base and Standards Cases in 2019 for the 

PTAC 7,000 – 15,000 Btu/h Equipment Class

Efficiency Level

Market Share

ASHRAE

Standards Case

1 2 3 4 5

Baseline 0.0%

1 37.9%

2 29.0% 68.7%

3 29.3% 27.6% 96.3%

4 2.5% 2.5% 2.5% 98.8%

5 0.9% 0.9% 0.9% 0.9% 99.7%

6 0.3% 0.3% 0.3% 0.3% 0.3% 100.0%

Table 10.2.3 Efficiency Distributions for the Base and Standards Cases for the PTAC > 

15,000 Btu/h Equipment Class

Efficiency Level

Market Share

ASHRAE Standards Case

1 2 3 4 5

Baseline 0.0%

1 65.1%

2 17.4% 87.4%

3 17.5% 12.6% 100.0%

4 0.0% 0.0% 0.0% 100.0%

5 0.0% 0.0% 0.0% 0.0% 100.0%

6 0.0% 0.0% 0.0% 0.0% 0.0% 100.0%

10-2 
Table 10.2.4 Efficiency Distributions for the Base and Standards Cases in 2019 for the 

PTHP < 7,000 Btu/h Equipment Class

Efficiency Level

Market Share

ASHRAE

Standards Case

1 2 3 4 5

Baseline 0.0%

1 85.4%

2 14.6% 100.0%

3 0.0% 0.0% 100.0%

4 0.0% 0.0% 0.0% 100.0%

5 0.0% 0.0% 0.0% 0.0% 100.0%

Table 10.2.5 Efficiency Distributions for the Base and Standards Cases in 2019 for the 

PTHP 7,000 – 15,000 Btu/h Equipment Class

Efficiency Level

Market Share

ASHRAE

Standards Case

1 2 3 4 5

Baseline 0.0%

1 63.8%

2 26.2% 90.0%

3 9.5% 9.5% 99.5%

4 0.5% 0.5% 0.5% 100.0%

5 0.0% 0.0% 0.0% 0.0% 100.0%

Table 10.2.6 Efficiency Distributions for the Base and Standards Cases in 2019 for the 

PTHP > 15,000 Btu/h Equipment Class

Efficiency Level

Market Share

ASHRAE

Standards Case

1 2 3 4 5

Baseline 0.0%

1 74.4%

2 25.6% 100.0%

3 0.0% 0.0% 100.0%

4 0.0% 0.0% 0.0% 100.0%

5 0.0% 0.0% 0.0% 0.0% 100.0%

Technological improvement in equipment and historical shifts to higher energy efficiency 

suggest that the distribution of efficiencies do not remain constant. DOE therefore used the 

efficiency trend to establish the efficiency distribution, as described in chapter 8, and to project 

the efficiency distribution for the years after the compliance year for the standard case 

shipments. Figure 10.2.1 shows the trend in market-weighted efficiency for each equipment 

class.

10-3 
Figure 10.2.1 Efficiency Trends for Packaged Terminal Air Conditioners and Heat Pumps

10.3 NATIONAL ENERGY SAVINGS

10.3.1 Definition

DOE calculates annual NES as the difference between two projections: a base case 

(without new standards) and a standards case (with new standards). The standards cases also take 

into account the energy use of units repaired rather than replaced. 

The calculation of annual nation energy savings (NESy) are represented by the following 

expressions.

Cumulative energy savings are the sum of each annual NES over the lifetime of 

equipment shipped or repaired in the period that extends from a standard’s assumed compliance 

date for 30 years. This calculation is represented by the following equations for:

DOE calculated AEC by multiplying the number or stock of a given piece of equipment 

(by vintage) by its unit energy consumption (also by vintage). The calculation of the national and 

each regional AEC is represented by the following equation:

NES y = AEC −basenatl AECnatl−std

_

NEScum = ∑NES y

10-4 
Where:

AEC = annual energy consumption each year for the Nation in quadrillion 

British thermal units (Btus)—quads—summed over vintages of the 

equipment stock, STOCKV; 

NESy = national annual energy savings (quads);

NEScum = national cumulative energy savings (quads);

STOCKV = stock of equipment (millions of units) of vintage V that survive in 

the year for which DOE calculated annual energy consumption;

UECV = annual energy consumption per unit in kilowatt-hours (kWh); 

electricity consumption is converted from site energy to power 

plant energy (quads) by applying a time-dependent conversion 

factor;

natl = designates the quantity corresponding to the Nation;

base = designates the quantity corresponding to the base case;

std = designates the quantity corresponding to the standards case;

y = year in the projection; and

cum = cumulative over the projection period; and

V = year in which the equipment was purchased as a new unit.

The stock of PTAC and PTHP equipment is dependent on annual shipments, repairs, and 

the lifetime of the equipment. As described in Chapter 9, DOE conducted shipments projections

under the base case and standards cases. DOE determined that the shipment projections under the 

standards cases were lower than those in the base case projection, due to the higher installed cost 

of the more-efficient equipment, which would cause some customers to repair rather than replace

equipment. These so-called extended repairs are higher in the standards cases.

10.3.2 NES Inputs 

The inputs for calculating national energy savings are:

• average annual energy consumption per unit (UEC), 

• shipments and extended repairs, 

• equipment stock (STOCKV),

• annual energy consumption for the Nation (AEC), and

• power plant primary energy use factor (src_conv). 

10.3.2.1 Annual Energy Consumption per Unit 

The annual energy consumption per unit (UEC) is the site energy consumed by a PTAC

or PTHP unit per year. The annual energy consumption is directly tied to the efficiency of the 

unit. Thus, knowing the efficiency of a PTAC or PTHP unit enables a determination of the 

corresponding annual energy consumption. 

= ∑ V ×UECV AEC STOCK

10-5 
For PTACs, as detailed in chapter 7, DOE used unit energy consumption data obtained 

from the 2008 Energy Conservation Standards Rulemaking for PTAC equipment. To account for 

differences in cooling capacity and/or EER from the previous rulemaking, the UEC (cooling) for 

each equipment class and each efficiency level were linearly scaled from source to target cooling 

capacity and/or EER. 

For PTHP, also detailed in chapter 7, DOE did not conduct an energy use and end-use 

load characterization analysis. Thus, while DOE developed projections of market shares by 

efficiency level for PTHP, DOE did not develop the relationship of annual energy consumption 

to efficiency specifically for PTHPs. Rather, the cooling and heating UEC for each equipment 

class and each efficiency level were each, independently, linearly scaled from source to target 

cooling capacity and/or EER.

DOE adjusted UECs to account for changes in climate based on analyses of weather 

databases. DOE determined annual projected market shares by efficiency level that, in turn, 

when multiplied by annual energy consumption values by efficiency level, enabled a 

determination of shipment-weighted annual energy consumption values. 

10.3.2.2 Shipments

DOE projected shipments for the base case and all standards cases (see Chapter 9). 

Several factors, including total installed costs, operating cost, and equipment lifetime, all impact 

projected shipments. Of the above factors, total installed costs were the primary driver in 

projecting the impact of standards on shipments. As noted earlier, the increased installed cost of 

more-efficient equipment causes some customers to forego equipment purchases. Consequently, 

shipments projected under the standards cases are lower than those projected under the base case. 

An extensive description of the methodology for conducting and generating the shipments 

projections can be found in Chapter 9.

10.3.2.3 Equipment Stock

The PTAC and PTHP stock in a given year is the number of PTAC and PTHP units 

shipped from earlier years that survive in the given year. The NIA model keeps track of the 

PTAC and PTHP equipment shipped each year. DOE assumed that PTAC and PTHP equipment 

have an increasing probability of retiring as they age. The probability of survival as a function of 

years-since-purchase is the survival function. Lifetimes range from 1 to approximately 20 years, 

with an average lifetime of 10 years (see chapters 8 and 9 for further details). 

10.3.2.4 National Annual Energy Consumption

The national energy consumption is the product of the per-unit PTAC and PTHP annual 

energy consumption and the number of PTAC and PTHP units of each vintage and efficiency. 

This approach accounts for differences in unit energy consumption from year to year.

For each equipment class, DOE calculated the total national site (i.e., the energy 

consumed at the household or establishment) annual energy consumption (AEC). Annual energy 

consumption is the product of the AEC per unit [also termed the unit energy consumption 

10-6 
(UEC)] and the number of units of each vintage and efficiency. This method accounts for 

differences in UEC from year to year. 

In determining national annual energy consumption, DOE initially calculated the annual 

energy consumption at the site (i.e., electricity in kWh consumed by the PTAC and PTHP unit 

within the building it is serving). DOE then calculated primary energy consumption from site 

energy consumption by applying a conversion factor to account for losses associated with the 

generation, transmission, and distribution of electricity.

10.3.2.5 Site to Primary Energy Conversion Factor

DOE calculates primary energy savings (power plant consumption) from site energy 

savings by applying a factor to account for losses associated with the generation, transmission, 

and distribution of electricity. DOE derived annual average site-to-power plant factors based on 

the version of the National Energy Modeling System (NEMS) that corresponds to Energy 

Information Administration (EIA) Annual Energy Outlook 2013 (AEO 2013).1 The factors 

change over time in response to projected changes in the types of power plants projected to 

provide electricity to the country. Figure 10.3.1shows the site-to-power plant factors from 2019

to the end of the projection period. For years after 2040 (the last year in the AEO), DOE held the 

factors constant at the 2040 value. 

 

Figure 10.3.1 Site-to-Power Plant Energy Use Factors 

10.1.1.1 Full-Fuel-Cycle Energy Factors

The full-fuel-cycle (FFC) measure includes point-of-use (site) energy, the energy losses 

associated with generation, transmission, and distribution of electricity, and the energy consumed 

in extracting, processing, and transporting or distributing primary fuels. To complete the full7.600

7.800

8.000

8.200

8.400

8.600

8.800

9.000

9.200

201920212023202520272029203120332035203720392041204320452047204920512053205520572059

2061

20632065206720692071207320752077

Source mn Btu/Site MWh

10-7 
fuel-cycle by encompassing the energy consumed in extracting, processing, and transporting or 

distributing primary fuels, which we refer to as “upstream” activities, DOE developed FFC 

multipliersa using the data and projections generated by the NEMS used for AEO 2013. The 

AEO provides extensive information about the energy system, including projections of future oil, 

natural gas and coal supply, energy use for oil and gas field and refinery operations, and fuel 

consumption and emissions related to electric power production. This information can be used to 

define a set of parameters representing the energy intensity of energy production.

Table 10.3.1 shows the FFC energy multipliers used for PTACs and PTHPs for selected 

years. The method used to calculate FFC energy multipliers is described in appendix 10-A. 

Table 10.3.1 Full-Fuel-Cycle Energy Multipliers (Based on AEO 2013) 

2019 2020 2025 2030 2035 2040

Electricity

(power plant energy use) 1.041 1.041 1.040 1.040 1.041 1.040 

Natural Gas (site) 1.101 1.101 1.100 1.098 1.099 1.100

Petroleum Fuels (site) 1.139 1.140 1.148 1.158 1.166 1.168

10.4 NET PRESENT VALUE OF CUSTOMER BENEFITS

10.4.1 Net Present Value Definition

The NPV is the value in the present of a time-series of costs and savings. The NPV is 

described by the equation: 

Where:

PVS = present value of savings in operating cost (including costs for energy, 

repair, and maintenance); and 

PVC = present value of increase in total installed cost (including costs for 

equipment, extended repairs, and installation). 

DOE determined the PVS and PVC according to the following expressions.

a

 FFC multipliers discussed in this chapter relate to the upstream part of the FFC process. 

NPV PVCPVS _ =

PVS ∑ ×= DFOCS yy

PVC ∑TIC ×= DFyy

10-8 

 
DOE calculated the total annual savings in operating cost by multiplying the number or 

stock of a given equipment (by vintage) by its per-unit operating cost savings (also by vintage). 

DOE calculated the total annual increase in installed cost by multiplying the number or stock of a 

given equipment (by vintage) by its per-unit total installed cost increase or extended repair cost

(also by vintage). Total annual savings in operating cost and increases in installed cost and 

extended repair cost are calculated using the following equations.

Where:

OCS = total annual savings in operating cost each year summed 

over vintages of the equipment stock, STOCKV; 

TIC = total annual increase in installed cost and extended repair 

cost each year summed over vintages of the equipment stock, STOCKV; 

DF = discount factor in each year;

STOCKV = stock of equipment (millions of units) of vintage V that survive in the year 

for which DOE calculated annual energy consumption;

UOCSV = annual per-unit savings in operating cost;

UTICV = annual total per-unit increase in installed cost and extended repair cost; 

 V = year in which the equipment was purchased as a new unit or repaired; and 

 y = year in the projection. 

DOE determined the PVC for each year from the compliance date of the standard until 

2048. DOE determined the PVS for each year from the compliance date of the standard until the 

year when units purchased or repaired in 2048 retire. DOE calculated costs and savings as the 

difference between each standards case and the base case. 

DOE calculated a discount factor from the discount rate and the number of years between 

the “present” (2014, the year to which the sum is being discounted) and the year in which the 

costs and savings occur. The NPV is the sum over time of the discounted net savings.

10.4.2 Inputs to Calculation

Listed below are the inputs to DOE’s calculation of the NPV of costs and savings.

• total annual installed cost, 

• total annual operating costs, 

• discount factor (DF), 

• present value of total annual increases in installed cost (TIC), 

• present value of savings (PVS). 

OCS y =∑STOCKV ×UOCSV

TICy = ∑STOCKV ×UTICV

10-9 
The total annual increase in installed cost is equal to the annual change in the total perunit installed cost (difference between base case and standards case) multiplied by the shipments 

projected for each standards case. As with calculating energy savings, DOE did not use base-case 

shipments to calculate total annual installed costs for all of the equipment classes. DOE used the 

projected shipments and stock for each standards case to calculate costs.

The annual operating cost includes energy and maintenance costs. The total annual 

savings in operating cost are equal to the change in the annual operating costs (difference 

between base case and standards case) per unit multiplied by the shipments projected for each 

candidate standard level. As with calculating total annual installed costs, DOE did not use basecase shipments to calculate savings in operating cost. 

10.4.2.1 Total Annual Installed Cost 

The increase in the total annual installed cost is equal to the annual change in the per-unit

total installed cost (difference between base case and standards case) multiplied by the shipments

projected in the standards case. The total installed cost includes both the equipment cost and the 

installation cost. Table 10.4.1 provides average total installed cost values by efficiency level for 

all PTAC and PTHP equipment classes. 

Table 10.4.1 Average Total Installed Costs for PTACs and PTHPs in 2019 (2013$) 

Equipment Class

Efficiency Level

0 1 2 3 4 5 6

PTAC – 7,000 Btu/h $1,319 $1,330 $1,339 $1,358 $1,379 $1,402 $1,414

PTAC – 9,000 Btu/h $1,423 $1,434 $1,443 $1,460 $1,478 $1,498 $1,509

PTAC – 15,000 Btu/h $1,677 $1,689 $1,698 $1,721 $1,751 $1,787 $1,808

PTHP – 7,000 Btu/h $1,438 $1,447 $1,465 $1,487 $1,510 $1,522

PTHP – 9,000 Btu/h $1,544 $1,553 $1,570 $1,589 $1,609 $1,619

PTHP – 15,000 Btu/h $1,794 $1,802 $1,825 $1,855 $1,892 $1,913

 

As discussed in section 10.2, DOE developed base case and standards case projections of 

market share by efficiency level. DOE multiplied the market share by efficiency level in each 

year by the values in Table 10.4.1 to calculate annual shipment-weighted average total installed 

costs. 

10.4.2.2 Total Annual Operating Cost 

The annual operating cost savings are equal to the change in the annual operating costs 

(difference between base case and standards case) per unit multiplied by the shipments projected 

in the standards case. The annual operating cost includes electricity and repair/maintenance 

costs.

Annual Electricity Cost Savings

As explained in chapter 7, DOE calculated annual electricity costs using data from the 2008 

rulemaking which provided unit energy consumption for PTACs and PTHPs. Chapter 8 

describes how DOE calculated annual electricity prices for PTAC and PTHP equipment. 

10-10 
Table 10.4.2 provides weighted-average annual electricity expense values for each

efficiency level and each PTAC and PTHP equipment class. 

Table 10.4.2 Average Annual Electricity Costs in 2019 (2013$) 

Equipment Class

Efficiency Level

0 1 2 3 4 5 6

PTAC < 7,000 Btu/h $71 $70 $69 $67 $65 $62 $61 

PTAC 7,000 – 15,000 Btu/h $86 $85 $83 $81 $79 $77 $76

PTAC > 15,000 Btu/h $134 $133 $132 $129 $127 $124 $123

PTHP < 7,000 Btu/h $137 $136 $133 $131 $127 $126

PTHP 7,000 – 15,000 Btu/h $158 $155 $152 $149 $146 $145

PTHP > 15,000 Btu/h $226 $225 $221 $217 $212 $211

 

As with the total installed cost data, DOE developed projected annual electricity expenses 

based on the annual projections of market share by efficiency level specified in the base case and 

standards cases. DOE multiplied the market share by efficiency level in each year by the values 

in Table 10.4.2 to calculate annual shipment-weighted average annual electricity costs. DOE 

then applied electricity price trends from AEO 2013 and CDD trends to scale the electricity 

expenses moving forward.

Annual Maintenance Costs

DOE determined the average annual maintenance costs to be $56 for PTACs and $63 for PTHPs. 

Because maintenance costs do not change with efficiency, annual maintenance costs do not 

factor into the determination of the total operating cost savings.

Annual Repair Costs

Since annualized warranty costs offer a proxy price for the price of a repair, DOE determined the 

average annual repair cost for PTACs and PTHPs by dividing the total cost of various 

manufacturer- and third-party-provided warranties for a unit by the duration of the warranty. 

Table 10.4.5 provides repair cost values by efficiency level for the PTAC and PTHP equipment 

classes. 

10-11 
Table 10.4.3 Average Repair Cost Per Unit for PTACs and PTHPs in 2019 (2013$) 

Equipment Class

Efficiency Level

0 1 2 3 4 5 6

PTAC < 7,000 Btu/h $18 $18 $18 $19 $19 $20 $20

PTAC 7,000 – 15,000 Btu/h $18 $18 $18 $19 $19 $20 $20

PTAC > 15,000 Btu/h $18 $18 $18 $19 $19 $20 $21

PTHP < 7,000 Btu/h $19 $19 $19 $19 $20 $20

PTHP 7,000 – 15,000 Btu/h $19 $19 $19 $20 $20 $20

PTHP > 15,000 Btu/h $19 $19 $19 $20 $21 $21

10.4.2.3 Discount Factor

DOE multiplied monetary values in future years by a discount factor to determine the 

present value. The discount factor (DF) is described by the equation:

Where:

r = discount rate, 

y = year of the monetary value, and 

yP = year in which the present value is being determined.

Although DOE used consumer discount rates to determine the life-cycle cost of PTAC 

equipment (chapter 8), it used national discount rates to calculate national NPV. DOE estimated 

NPV using both a 3-percent and a 7-percent real discount rate, in accordance with the Office of 

Management and Budget’s guidance to Federal agencies on the development of regulatory 

analysis, particularly section E therein: Identifying and Measuring Benefits and Costs.

2

 DOE 

defined the present year as 2014. 

10.4.2.4 Present Value of Increased Installed Costs 

The present value of increased installed cost is the difference between installation cost in 

each standards case and the base case discounted to the present and summed throughout the 

period over which DOE is considering the installation of units (from the compliance date of 

standards, 2019, through 2048). DOE calculated annual increases in installed cost as the 

difference in total installed cost for new equipment purchased each year between the base case 

and each standards case. DOE also calculated the repair costs for units that are repaired rather 

than replaced in the standards cases.

10.4.2.5 Present Value of Savings

The present value of annual savings in operating cost is the difference between the base 

case and each standards case discounted to the present and summed throughout the period from 

the compliance date, 2019, to the time when the last unit installed in 2048 is retired from service.

y( yp ) _

)r(

DF

+1

1 =

10-12 
Savings represent decreases in operating cost (including electricity and maintenance) 

associated with the more energy efficient equipment purchased in each standards case compared 

to the base case. Savings are reduced by the energy costs associated with units that are repaired 

rather than replaced in the standards cases. Total annual savings in operating cost are the savings 

per unit multiplied by the number of units of each vintage that survive in a particular year. 

10.5 TRIAL STANDARD LEVELS

DOE developed TSLs that combine efficiency levels for each equipment class. Table 

10.5.1 presents the efficiency levels for each equipment class in each TSL. 

Table 10.5.1 Trial Standard Levels for PTACs and PTHPs

Equipment Class ASHRAE TSL 1 TSL 2 TSL 3 TSL 4TSL 5

Efficiency Level

PTAC < 7,000 Btu/h 1 2 3 4 5 6

PTAC 7,000 – 15,000 Btu/h 1 2 3 4 5 6

PTAC > 15,000 Btu/h 1 2 3 4 5 6

PTHP < 7,000 Btu/h 0 1 2 3 4 5

PTHP 7,000 – 15,000 Btu/h 0 1 2 3 4 5

PTHP > 15,000 Btu/h 0 1 2 3 4 5

10.6 NES AND NPV RESULTS

10.6.1 National Energy Savings 

The following section provides NES results for the trial standard levels considered for 

PTAC and PTHP equipment. DOE based the inputs to the NIA model on weighted-average 

values, yielding results that are discrete point values rather than a distribution of values as in the 

LCC analysis.

Table 10.6.1 and Table 10.6.2 show the NES results for the TSLs that DOE analyzed. To 

demonstrate the relative share of the energy savings due to each equipment class, DOE

disaggregated the results by PTAC and PTHP equipment class.

10-13 
Table 10.6.1 Cumulative Primary Energy Savings for PTAC and PTHP equipment 

(quads) 

Product Class** ASHRAE* 

Trial Standard Level

1 2 3 4 5

PTAC < 7,000 Btu/h 0.000 0.000 0.001 0.002 0.003 0.003

PTAC 7,000 – 15,000 Btu/h 0.000 0.005 0.022 0.046 0.060 0.061

PTAC > 15,000 Btu/h 0.001 0.001 0.002 0.004 0.005 0.005

PTHP < 7,000 Btu/h - 0.000 0.002 0.003 0.003 0.003

PTHP 7,000 – 15,000 Btu/h - 0.008 0.028 0.054 0.069 0.071

PTHP > 15,000 Btu/h - 0.001 0.003 0.006 0.007 0.008

Total – All Classes 0.001 0.015 0.058 0.116 0.148 0.152

*Cells that have “-“ have zero energy savings because efficiency remains the same at this level. 

**Energy savings of 0.000 have energy savings but cannot be shown due to rounding. 

Table 10.6.2 Full-Fuel-Cycle National Energy Savings for PTAC and PTHP (quads)

Product Class** ASHRAE* 

Trial Standard Level

1 2 3 4 5

PTAC < 7,000 Btu/h 0.000 0.000 0.001 0.002 0.003 0.003

PTAC 7,000 – 15,000 Btu/h 0.000 0.005 0.023 0.047 0.061 0.062

PTAC > 15,000 Btu/h 0.001 0.001 0.002 0.004 0.005 0.006

PTHP < 7,000 Btu/h - 0.000 0.002 0.003 0.003 0.004

PTHP 7,000 – 15,000 Btu/h - 0.008 0.028 0.055 0.070 0.072

PTHP > 15,000 Btu/h - 0.001 0.003 0.006 0.008 0.008

Total – All Classes 0.001 0.015 0.059 0.118 0.150 0.155

*Cells that have “-“ have zero energy savings because efficiency remains the same at this level. 

**Energy savings of 0.000 have energy savings but cannot be shown due to rounding. 

10.6.2 Annual Costs and Savings

As a prelude to providing the NPVs for each trial standard level in each equipment class, 

this section presents the annual total installed cost increases and annual operating cost savings at 

the national level.

Figure 10.6.1 to Figure 10.6.6 show the changes over time of the non-discounted annual 

total installed cost increases and the non-discounted operating cost savings for each product class 

at TSL 2. The figures also show the net annual impact, which is the difference between the 

savings and costs for each year. The annual total installed cost change is the increase in the total 

installed cost for equipment purchased each year in the period 2019–2048. The annual operating 

cost savings is the savings in operating costs for equipment that has been purchased, and has not 

been retired, for each year until all purchased equipment has been retired. The NPV is the 

10-14 
difference between the cumulative annual discounted savings and the cumulative annual 

discounted costs.

Figure 10.6.1 Packaged Terminal Air Conditioners > 7,000 Btu/h: Installed Costs, 

Operating Cost Savings, and Net Savings; TSL 2

-0.200

-0.100

0.000

0.100

0.200

0.300

0.400

201920202021202220232024202520262027202820292030203120322033203420352036203720382039204020412042204320442045204620472048

Equipment cost

Increase

Operating Cost Savings

-4.000

-2.000

0.000

2.000

4.000

6.000

8.000

10.000

201920202021202220232024202520262027202820292030203120322033203420352036203720382039204020412042204320442045204620472048

Equipment cost Increase

Operating Cost Savings

Net Savings

10-15 
Figure 10.6.2 Packaged Terminal Air Conditioners ≥ 7,000 Btu/h and ≤15,000 Btu/h: 

Installed Costs, Operating Cost Savings, and Net Savings; TSL 2

Figure 10.6.3 Packaged Terminal Air Conditioners > 15,000 Btu/h: Installed Costs, 

Operating Cost Savings, and Net Savings; TSL 2

Figure 10.6.4 Packaged Terminal Heat Pumps – < 7,000 Btu/h: Installed Costs, Operating 

Cost Savings, and Net Savings; TSL 2

-1.000

-0.500

0.000

0.500

1.000

1.500

201920202021202220232024202520262027202820292030203120322033203420352036203720382039204020412042204320442045204620472048

Equipment cost Increase

Operating Cost Savings

Net Savings

-0.300

-0.200

-0.100

0.000

0.100

0.200

0.300

0.400

0.500

0.600

201920202021202220232024202520262027202820292030203120322033203420352036203720382039204020412042204320442045204620472048

Equipment cost Increase

Operating Cost Savings

Net Savings

10-16
Figure 10.6.5 Packaged Terminal Heat Pumps ≥ 7,000 Btu/h and ≤15,000 Btu/h : Installed 

Costs, Operating Cost Savings, and Net Savings; TSL 2

-4.000

-2.000

0.000

2.000

4.000

6.000

8.000

10.000

12.000

201920202021202220232024202520262027202820292030203120322033203420352036203720382039204020412042204320442045204620472048

Equipment cost Increase

Operating Cost Savings

Net Savings

-0.400

-0.200

0.000

0.200

0.400

0.600

0.800

1.000

1.200

1.400

201920202021202220232024202520262027202820292030203120322033203420352036203720382039204020412042204320442045204620472048

Equipment cost Increase

Operating Cost Savings

Net Savings

10-17 
Figure 10.6.6 Packaged Terminal Heat Pumps > 15,000 Btu/h: Installed Costs, Operating 

Cost Savings, and Net Savings; TSL 2

10.6.3 Net Present Value Results

The following section provides NPV results for the trial standard levels considered for 

PTAC and PTHP equipment. Results are cumulative and are shown as discounted values in 

dollar terms. 

The present value of increased total installed costs is the total installed cost increase (i.e., 

the difference between the standards case and base case), discounted to the present, and summed 

over the period of shipments forecasts (i.e., from the effective date of standards, 2019, to 2048). 

The results presented here assume no change in equipment prices during the forecast period. 

Savings are decreases in operating costs associated with the higher energy efficiency of 

PTAC and PTHP equipment purchased in the standards case compared to the base case. Total 

operating cost savings are the savings per unit multiplied by the number of units of each vintage 

(i.e., the year of manufacture) surviving in a particular year. For all units purchased in 2019-

2048, the operating cost includes energy consumed and maintenance and repair costs incurred 

until the last unit is retired from service.

Table 10.6.3 and Figure 10.6.7 show the NPV results for PTAC and PTHP equipment at 

each TSL, based on a seven-percent discount rate. DOE based all results on electricity price 

forecasts from the AEO2013 Reference Case. Table 10.6.4 and Figure 10.6.8 provide the NPV 

results based on a three-percent discount rate and electricity price forecasts from the AEO2013

Reference Case. 

DOE also developed sensitivity analyses using an increasing product price trend and a 

decreasing product price trend coupled with AEO2013 Low Economic Growth and High

Economic Growth cases, respectively. These product trends and AEO Economic Growth case are 

described in appendix 10-B, which also presents NPV results based on these alternative 

sensitivities.

Table 10.6.3 Cumulative NPV Results for PTAC and PTHP, 7% Discount Rate (millions 

2013$)

Product Class Trial Standard Level

1 2 3 4 5

PTAC < 7,000 Btu/h 0.0 -0.5 -1.5 -2.4 -2.6

PTAC 7,000 – 15,000 Btu/h -0.1 -2.6 -9.5 -17.9 -19.8

PTAC > 15,000 Btu/h -0.2 -2.1 -5.5 -8.5 -9.1

PTHP < 7,000 Btu/h 0.1 0.3 0.3 0.2 0.1

PTHP 7,000 – 15,000 Btu/h 6.4 14.9 24.0 28.4 28.8

PTHP > 15,000 Btu/h 0.2 0.6 0.1 -1.0 -1.3

Total – All Classes 6.5 10.7 7.9 -1.1 -3.8

10-18 
Figure 10.6.7 TSL 2: Present Value of Annual Costs and Benefits for all PTACs and 

PTHPs, 7% Discount Rate

Table 10.6.4 Cumulative NPV Results for PTAC and PTHP, 3% Discount Rate (millions 

2013$)

Product Class Trial Standard Level

1 2 3 4 5

PTAC < 7,000 Btu/h 0.0 -0.1 -0.6 -1.3 -1.4

PTAC 7,000 – 15,000 Btu/h 3.9 14.0 21.4 20.4 19.5

PTAC > 15,000 Btu/h -0.1 -2.5 -7.3 -11.2 -12.0

PTHP < 7,000 Btu/h 0.7 1.9 3.0 3.5 3.5

PTHP 7,000 – 15,000 Btu/h 18.4 51.9 92.4 114.2 116.9

PTHP > 15,000 Btu/h 1.1 3.7 4.9 4.5 4.4

Total – All Classes 23.9 69.0 113.8 130.2 131.0

-8

-6

-4

-2

0

2

4

6

8

10

201920202021202220232024202520262027202820292030203120322033203420352036203720382039204020412042204320442045204620472048

Equipment cost Increase

Operating Cost Savings

Net Savings

10-19 
Figure 10.6.8 TSL 2: Present Value of Annual Costs and Benefits for all PTACs and 

PTHPs, 3% Discount Rate

-8

-6

-4

-2

0

2

4

6

8

10

12

201920202021202220232024202520262027202820292030203120322033203420352036203720382039204020412042204320442045204620472048

Equipment cost

Increase

Operating Cost

Savings

10-20 
10.6.4 Alternative Base Case Analysis

The alternative base case analysis was based off a scenario where the mandatory 

efficiency level is the Federal minimum. Chapter 8 presents the alternative base case efficiency 

market shares in the compliance year for PTACs and PTHPs. The calculations for NES and NPV 

were performed against this alternative base case and the cumulative primary energy savings, 

FFC national energy savings, and NPV results at the 7% and 3% discount rates are shown in 

Table 10.6.5 to Table 10.6.8, for informational purposes. 

Table 10.6.5 Cumulative Primary Energy Savings for PTAC and PTHP Equipment

Compared to the Alternative Base Case (quads)

Product Class** ASHRAE* 

Trial Standard Level

1 2 3 4 5

PTAC < 7,000 Btu/h 0.000 0.000 0.001 0.002 0.003 0.003

PTAC 7,000 – 15,000 Btu/h 0.000 0.004 0.022 0.046 0.060 0.061

PTAC > 15,000 Btu/h 0.001 0.001 0.003 0.005 0.006 0.006

PTHP < 7,000 Btu/h - 0.000 0.002 0.003 0.003 0.003

PTHP 7,000 – 15,000 Btu/h - 0.008 0.028 0.054 0.069 0.071

PTHP > 15,000 Btu/h - 0.001 0.003 0.006 0.007 0.008

Total – All Classes 0.001 0.014 0.059 0.116 0.148 0.152

*Cells that have “-“ have zero energy savings because efficiency remains the same at this level. 

**Energy savings of 0.000 have energy savings but cannot be shown due to rounding. 

Table 10.6.6 Full-Fuel-Cycle National Energy Savings for PTAC and PTHP Equipment

Compared to the Alternative Base Case (quads)

Product Class** ASHRAE* 

Trial Standard Level

1 2 3 4 5

PTAC < 7,000 Btu/h 0.000 0.000 0.001 0.002 0.003 0.003

PTAC 7,000 – 15,000 Btu/h 0.000 0.004 0.023 0.047 0.061 0.062

PTAC > 15,000 Btu/h 0.001 0.001 0.003 0.005 0.006 0.006

PTHP < 7,000 Btu/h - 0.000 0.002 0.003 0.003 0.004

PTHP 7,000 – 15,000 Btu/h - 0.008 0.028 0.055 0.070 0.072

PTHP > 15,000 Btu/h - 0.001 0.003 0.006 0.008 0.008

Total – All Classes 0.001 0.015 0.060 0.118 0.151 0.155

*Cells that have “-“ have zero energy savings because efficiency remains the same at this level. 

**Energy savings of 0.000 have energy savings but cannot be shown due to rounding. 

10-21 
Table 10.6.7 Cumulative NPV Results for PTAC and PTHP Equipment Compared to the 

Alternative Base Case, 7% Discount Rate (millions 2013$)

Product Class Trial Standard Level

1 2 3 4 5

PTAC < 7,000 Btu/h 0.0 -0.5 -1.5 -2.4 -2.6

PTAC 7,000 – 15,000 Btu/h -0.1 -2.6 -9.6 -17.9 -19.9

PTAC > 15,000 Btu/h -0.2 -2.3 -5.7 -8.7 -9.3

PTHP < 7,000 Btu/h 0.1 0.3 0.3 0.2 0.1

PTHP 7,000 – 15,000 Btu/h 6.4 14.9 24.0 28.4 28.8

PTHP > 15,000 Btu/h 0.2 0.6 0.1 -1.0 -1.3

Total – All Classes 6.5 10.5 7.6 -1.4 -4.1

Table 10.6.8 Cumulative NPV Results for PTAC and PTHP Equipment Compared to the 

Alternative Base Case, 3% Discount Rate (millions 2013$)

Product Class Trial Standard Level

1 2 3 4 5

PTAC < 7,000 Btu/h 0.0 -0.1 -0.6 -1.3 -1.4

PTAC 7,000 – 15,000 Btu/h 3.4 13.9 21.3 20.3 19.5

PTAC > 15,000 Btu/h -0.1 -2.6 -7.5 -11.4 -12.1

PTHP < 7,000 Btu/h 0.7 1.9 3.0 3.5 3.5

PTHP 7,000 – 15,000 Btu/h 18.4 51.9 92.4 114.2 116.9

PTHP > 15,000 Btu/h 1.1 3.7 4.9 4.5 4.4

Total – All Classes 23.5 68.8 113.6 130.0 130.8

10-22 
REFERENCES 

1. U.S. Department of Energy, Annual Energy Outlook 2013 with Projections to 2040, 

2013. Energy Information Administration. Washington, DC. 

<http://www.eia.gov/forecasts/aeo/> 

2. U.S. Office of Management and Budget, Circular A-4: Regulatory Analysis, September 

17, 2003. <http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf> 

10-23